Avadel Pharma (AVDL) Issues Corporate Update

Avadel Pharmaceuticals plc (Nasdaq: AVDL) today announced the steps it is taking to explore every available pathway to accelerate the decision by the U.S. Food and Drug Administration (FDA) to grant final approval of its lead drug candidate, FT218, prior to June 2023. Concurrent with this strategy, Avadel has received and agreed upon what is expected to be a final label and is completing the last edits of the Risk Evaluation and Mitigation Strategy (“REMS”) with FDA and expects to receive tentative approval of FT218.

“We believe the receipt of a tentative approval for the FT218 New Drug Application (NDA) will validate the clinical efficacy and safety profile of FT218 for people living with narcolepsy and will provide clarity on the timing and pathway to a potential final approval and subsequent commercial launch. Nearly every day we hear from disappointed patients who are waiting for a once at bedtime oxybate treatment option. We believe FT218 has a clear and meaningful place in the multi-billion-dollar narcolepsy market and will continue to pursue every potential option to make it available as soon as possible to all eligible patients whose lives it has the potential to improve,” said Greg Divis, Chief Executive Officer of Avadel Pharmaceuticals. “As part of these efforts, we are optimizing our cost structure by focusing our existing resources on our most important priorities, thus extending our cash runway and subsequent financial bridge to a potential final approval in June 2023 or sooner.”

Avadel, in alignment with our most important priorities, is taking the following actions, including those that can potentially accelerate FDA’s final approval decision and shorten the timeline between approval and launch of FT218:

• Submitted a Paragraph IV patent certification and expects to receive a tentative approval.
• Filed a motion in the U.S. District Court of Delaware to delist US Patent No. 8,731,963 (the “REMS patent”), from FDA’s Orange Book. A court order requiring the patent holder to delist the REMS patent from the Orange Book could provide a pathway for a final approval of FT218 prior to June 2023.
• Preparing for a claim construction hearing (“Markman hearing”) in the existing patent litigation in the U.S. District Court of Delaware which is scheduled for August 31, 2022. The Court has previously stated this claim construction hearing needs to take place prior to ruling on the motion to delist the REMS patent from the Orange Book.
• Investing in patient and physician education including the Company’s disease state program, www.narcolepsydisrupts.com, which has resulted in over 5,000 narcolepsy patient enrollments in the first half of 2022.
• Continuing key activities in anticipation of a final approval on or before June 2023, including planning for the final preparation of the FT218 REMS program and the continued manufacturing of commercial supply.
• Optimizing the cost structure to reduce total quarterly cash operating expenses to $12.0 to $14.0 million, excluding inventory purchases. A restructuring charge of between $3.0 - $4.0 million, comprised primarily of severance related costs associated with a nearly 50% reduction in workforce, is expected to be recorded in the second quarter of 2022. The Company expects to report greater than $100.0 million of cash, cash equivalents and marketable securities as of June 30, 2022.

Based on extensive market research and comprehensive claims data analytics, Avadel estimates the total patient population could be in the range of approximately 30,000-35,000 and expects FT218, if approved, to be the treatment of choice for patients suffering from narcolepsy-related excessive daytime sleepiness (EDS) or cataplexy. The current twice-nightly U.S. narcolepsy oxybate market is estimated at $1.8 billion comprised of approximately 16,000 patients. In addition, Avadel estimates that in the last three years, 10,000 – 15,000 patients have discontinued their twice-nightly oxybate use, many due to the complications associated with the middle of the night dosing. Furthermore, based on an analysis of U.S. claims data, the Company believes that each year approximately 3,000 patients initiate oxybate treatment for the first time and expects this to grow by 25-50% over time with the introduction of FT218. Based on the estimated total patient population, the potential market opportunity could be in excess of $3.0 billion annually.

Conference CallTo access the conference call, investors are invited to dial (844) 388-0559 (U.S. and Canada) or (216) 562-0393 (International). The conference ID number is 4176205. A live audio webcast can be accessed by visiting the investor relations section of the Company’s website, www.avadel.com. A replay of the webcast will be archived on Avadel’s website for 90 days following the event.

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